ADTRAN Holdings, Inc. (NASDAQ:ADTN) Released Earnings Last Week And Analysts Lifted Their Price Target To US$9.60
ADTRAN Holdings, Inc. (NASDAQ:ADTN) shareholders are probably feeling a little disappointed, since its shares fell 7.8% to US$5.69 in the week after its latest full-year results. Revenues were in line with expectations, at US$1.1b, while statutory losses ballooned to US$3.41 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for ADTRAN Holdings
Taking into account the latest results, the five analysts covering ADTRAN Holdings provided consensus estimates of US$1.03b revenue in 2024, which would reflect a chunky 9.9% decline over the past 12 months. Losses are predicted to fall substantially, shrinking 85% to US$0.52. Before this latest report, the consensus had been expecting revenues of US$1.06b and US$0.28 per share in losses. So it's pretty clear the analysts have mixed opinions on ADTRAN Holdings after this update; revenues were downgraded and per-share losses expected to increase.
The average price target lifted 11% to US$9.60, clearly signalling that the weaker revenue and EPS outlook are not expected to weigh on the stock over the longer term. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on ADTRAN Holdings, with the most bullish analyst valuing it at US$14.00 and the most bearish at US$7.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 9.9% by the end of 2024. This indicates a significant reduction from annual growth of 21% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.6% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - ADTRAN Holdings is expected to lag the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at ADTRAN Holdings. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple ADTRAN Holdings analysts - going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for ADTRAN Holdings you should know about.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
